| WASHINGTON,
D.C – U.S. Representative Jan Schakowsky (D-IL) today said that Congress
and the public have a right to know if the lending practices of Fannie
Mae and Freddie Mac “create racial disparities or discrimination in
lending.”
In
a letter to Housing and Urban Development (HUD) Secretary Mel Martinez,
following his announcement to shelve a study examining this issue, Schakowsky
urged the Secretary to reconsider his decision and instead release the
“fair lending review of the automated underwriting systems used by Fannie
Mae and Freddie Mac.”
Schakowsky
wrote, “I am concerned about the possible discriminatory impacts of
the GSE’s underwriting systems. Releasing the report would serve
to inform Congress and the public as to whether these systems work in a
non-discriminatory fashion.”
Schakowsky
also questioned why Fannie Mae and Freddie Mac apparently received a copy
of the report, while members of Congress have been denied access to the
study. “I have deep concerns about your decision to allow the
companies you regulate an opportunity to view the report before providing
it to Congress and the public.”
Below
is the full text of Schakowsky’s letter to Secretary Martinez:
October
30, 2003
The
Honorable Mel Martinez
Secretary
of Housing and Urban Development
U.S.
Department of Housing and Urban Development
451
7th Street, S.W.
Washington,
D.C. 20410
Dear
Secretary Martinez:
Several
days ago, Dow Jones Newswires reported that you have decided to shelve
the Department of Housing and Urban Development’s (HUD) fair lending review
of the automated underwriting systems used by Fannie Mae and Freddie Mac.
I strongly urge you to reconsider that decision and publicly release the
results of the study. This fair lending review, which was initiated by
former HUD Secretary Andrew Cuomo, is intended to determine if automated
underwriting systems used by Fannie Mae and Freddie Mac, create racial
disparities or discrimination in lending.
As
you may recall, I requested a copy of this study more than two years ago,
but your Department refused to provide it. Then, a year ago, you
told a reporter for Reuters that you would release the study before the
end of the calendar year. Now, you have reportedly decided not to
release the report at all.
It
is also my understanding that your Department sent a copy of the completed
report to Fannie Mae and Freddie Mac for their review for a period of at
least 30 days. I have deep concerns about your decision to allow
the companies you regulate an opportunity to view the report before providing
it to Congress and the public. This action is both surprising and
questionable. Certainly, it makes no sense to deny Congress and the
public access to this report now.
I
am concerned about the possible discriminatory impacts of the GSE’s underwriting
systems. Releasing the report would serve to inform Congress and
the public as to whether these systems work in a non-discriminatory fashion.
Even if the data is old and even if the systems have been changed, HUD
has an obligation, having used Congressionally appropriated funds to conduct
the study, to make it available to members of Congress. Moreover,
the age of the data should not be used as an excuse since it is your Department
that is responsible for the delays.
As
you know and as you have recently testified, homeownership by African-Americans
and Hispanics still lags far behind the U.S. average and the GSEs continue
to lag the market in supporting affordable home ownership opportunities
to first-time homebuyers, including African-American and Hispanic homebuyers.
It is important to find out whether problems with the GSEs automated underwriting
systems contribute to this persistent problem.
I
would very much appreciate receiving a copy of the report, any findings
and areas identified for further study, and any recommendations for action.
Finally, I would appreciate a briefing on the findings and results of this
report.
I
look forward to your response.
Sincerely,
Jan Schakowsky
Member of Congress |
